DiGi’s net profit rose 3.5% in 1Q18
Digi

The growth is attributed to positive uplifts on top line across service revenue, gross profit and Ebitda

By FARA AISYAH / Pic By ISMAIL CHE RUS

Digi.com Bhd posted a 3.48% increase in profit for the first quarter ended March 31, 2018 (1Q18), to RM386.11 million from RM373.11 million reported in the previous year’s corresponding period.

In an exchange filing to Bursa Malaysia last Friday, DiGi said the growth was attributed to positive uplifts on top line across service revenue, gross profit and earnings before interest, taxes, depreciation and amortisation (Ebitda), stronger operational efficiencies and improved operating cashflow.

DiGi CEO Albern Murty said the company managed to improve margins and returns, with earnings driven by the strong uptake momentum of its Internet and digital services offerings across its postpaid, prepaid, enterprise and new digital businesses.

“Our sharper focus in delivering an innovative range of products, services and solutions has enabled us to provide better value and experience in meeting our customers’ Internet needs.

“This is supported by the sound investments we have made to accelerate the strategic deployment of our spectrum portfolio to improve the quality, performance and capacity of our fourth-generation (4G) Plus network, while cost discipline and operational efficiencies have and will continue to be part of the way we create values,” Murty said in a statement.

DiGi’s service revenue grew 0.7% year-on-year (YoY) to RM1.48 billion in 1Q18, fuelled by solid Internet revenue growth within the quarter from the company’s strong postpaid performance and stronger data monetisation of its prepaid business.

The telcommunication company closed the quarter with 11.8 million subscribers with a healthy average revenue per user (ARPU) of RM42.

DiGi also attributed this steady performance to its relentless focus in providing high-quality customer and service experiences, with continuous upgrades and optimisation of its 4G Plus network to support the increasing data demand from customers.

In the three months’ period, DiGi grew its active Internet user base to 8.6 million, of which 6.6 million were 4G long-term evolution subscribers, driving a total of 67% 4G data traffic on its network.

In addition, its operating expenses (opex) to service revenue for the quarter improved to 33% with 0.8% YoY and 2.8% quarter-on-quarter (QoQ) reduction in opex aided by realised operational efficiency initiatives achieved across sales and marketing costs, as well as network-related opex.

Operating cashflow strengthened to 8.9% YoY to RM560 million, alongside a higher margin of 35% as a result of higher Ebitda and relatively lower YoY capital expenditures this quarter.

DiGi’s revenue for the period also grew 3.82% to RM1.63 billion from RM1.57 billion gained in January to March 2017.

These factors have led DiGi to declare a healthy 4.9 sen per share or RM381 million, payable to shareholders on June 29, 2018.